Some differences by income were observed. A larger percentage of people with multiple chronic conditions were found in the lowest income group, people who are going to be eligible for Medicaid coverage in the ACA. But the differences in family income by health condition are not tremendous.

Out-of-Pocket Spending

Cunningham next analyzed the data on out-of-pocket spending by the entire family for both out-of-pocket premiums and out-of-pocket services by family income and health condition. He found that out-of-pocket spending did tend to be higher for people with multiple chronic conditions but the differences were much larger for spending related to services. That reflects the fact that premiums tend to be more predictable. Also, more people are going to be in group coverage, for which there is less variation in the rates, whereas the out-of-pocket spending for services is less predictable.

A much larger percentage of people with multiple chronic conditions tended to have out-of-pocket spending that was greater than 10 percent of their income compared with people with even two chronic conditions, and certainly more than people with acute or no conditions.

One conclusion that can be drawn from these findings is that there tends to be a pretty systematic break for people with three or more chronic conditions compared with people with fewer chronic conditions, resulting in a level of seriousness, or intensity of service use, that leads to greater out-of-pocket spending.

Trends in High Financial Burden

Analysis of MEPS data for 2001, 2006, and 2008 shows that, across all condition categories, between 2001 and 2006 there was an increase in the percentage of people with high financial burden, defined as total out-of-pocket spending greater than 10 percent of family income. That reflects real incomes, adjusted for inflation, basically staying flat for that time period, as well as increases in out-of-pocket costs for both premiums and services. After 2006, however, there appears to be a leveling off for most people of out-of-pocket spending relative to income. For people with three or more chronic conditions, spending actually decreased, returning to 2001 levels.

Most of this trend appears to be related to a decrease in out-of-pocket spending for services; for people with multiple chronic conditions, it is related to a decrease in out-of-pocket prescription drug spending. Other data indicate that, during this time period, there has been a marked shift from brand name use to generic use of prescription drugs. So that could be



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